The following summarised transactions, for the financial year ending June 30, 2022

relate to the business of Alex Jay, a sole trader, who sells men's and women's

sporting apparel. Alex uses a perpetual inventory system. Transactions are GST

inclusive.

1. Credit purchases of sporting apparel throughout the year totalled $473,000

after taking away the trade discounts given to the business. Alex paid $5,500

cash for transportation inwards costs throughout the year.

2. Cash sales throughout the year totalled $440,000. Credit sales were

$330,000. The total cost of goods sold of these sales was $285,000,

3. Some of the sporting apparel purchased during the year wasn't in a fit state

for sale upon delivery. This apparel was returned to the supplier who agreed

to cancel $6,600 of the original purchase.

4. The total paid for selling and administrative expenses throughout the year was

$66,000.

5. Total cash paid to suppliers throughout the year was $352,000 having

received cash discounts totalline $22.000 for prompt payments

6. Throughout the year there was $4,400 of sporting apparel returned by

customers. None of the apparel had any damage so it was returned to stock.

The cost of the goods returned was $1,100.

7. $210,000 was received from trade debtors throughout the year having given

discounts of $11,000 for prompt payments.

8. The end of financial year stocktake on the 30 June 2022 showed that there

was unsold sporting apparel on hand worth $195,000.

9. The Inventory Ledger Account, prior to theitransactions listed above, had a

balance at 1 July 2021 of $65,000.

Required:

a. Prepare the general journal entries to record the above transactions. You are not

required to complete narrations or posting references.

b. Complete the Inventory ledger account (running balance format). You

are not required to complete posting references.

c. Alex is concerned about regular stock shortages that have been

revealed in the end of month stocktakes. What type of decisions could

Alex make to prevent stock shortages?